4 hrs ago
India and Japan Urged to Deepen Trade, Technology Partnerships
India and Japan work together in some important ways, but they do not trade very much with each other.
Economist Prachi Mishra says this could change.
A report from Ashoka University points to areas where they could cooperate, including semiconductors and rare earths.
Japanese companies could help make and process more products in India.
That could bring technology and investment to India.
Japan could also invest more of its large pension fund in India, Mishra said.
India has many young workers, while Japan has an ageing population.
Mishra says allowing goods, money and people to move more easily could help both countries build stronger supply chains.
Economist Prachi Mishra said India-Japan trade remains small despite their wider strategic cooperation.
Japan’s share of India’s exports and imports has fallen from around 10% or more in the 1980s to about 1–2%; India supplies less than 1% of Japan’s imports.
An Ashoka University report identifies opportunities in manufacturing, semiconductors, rare earths, financial services, infrastructure and skilled labour.
Mishra said Japanese investment in Indian manufacturing could support technology transfer, while Japanese institutional capital could offer another investment opportunity.
She argued that closer cooperation could diversify supply chains and strengthen resilience amid geopolitical uncertainty and concentrated rare-earth processing in China.
- Who
- Prachi Mishra, an economics professor and policy researcher at Ashoka University, discussed India-Japan economic ties.
- What
- Mishra called bilateral trade minuscule and urged deeper trade, investment and technology cooperation.
- Where
- India and Japan.
- When
- In an interview about the release of Ashoka University's India-Japan Economic Corridor report; the article also refers to agreements announced at the 16th India-Japan Annual Summit in July 2026.
- Why
- Mishra said closer economic integration could unlock trade and investment opportunities, diversify supply chains and improve resilience.
Case for deeper cooperation
Constraints and risks highlighted
Expanding economic ties
Case for deeper cooperation
Mishra said the countries' low trade levels leave significant untapped potential and that deeper ties could diversify supply chains.
Constraints and risks highlighted
The article reports that trade remains small: Japan accounts for about 1–2% of India's exports and imports, while India supplies less than 1% of Japan's imports.
Investment and technology transfer
Case for deeper cooperation
Mishra said more Japanese investment in Indian manufacturing could foster technology transfer and productivity, and institutional capital could offer further opportunities.
Constraints and risks highlighted
She noted that most Japanese investment in India is currently outside manufacturing and that India's share of Japan's government pension fund investments is below 1%.
Key facts
- India's share in Japan's imports
- Less than 1%, according to Mishra.
- Japan's share of India's exports and imports
- Around 1–2% now, compared with around 10% or more in the 1980s, Mishra said.
- India's share of Japan's outbound FDI
- About 4%, up from almost zero, according to Mishra.
- India's share of Japan's government pension fund investments
- Below 1%; Mishra said the fund has about $2 trillion in assets.
- Investment target
- A 10 trillion yen (about $68 billion) target was included in the broader bilateral partnership, according to the article.
- Potential cooperation areas
- Manufacturing, semiconductors, rare earths, financial services, infrastructure and skilled labour.
Quotes
Prachi Mishra
Economics professor and policy researcher at Ashoka University.
“The opportunity is really for both these countries to let trade, capital, and people move freely to build true resilience. And the moment is actually now.”
livemint.com
“Either way, if you look at this relationship, trade relationship, either Japan's importance for India and India's importance for Japan is minuscule.”
livemint.com
Sources
Related news
Ashish Dhawan Sees Tenfold Potential in India-Japan Economic Ties
India and Japan Deepen Defence Technology and Security Cooperation
India Defines Semiconductor Self-Reliance Through Trusted Global Partnerships
Jaishankar Sees Technology Driving Broader India-Europe Partnership
Nippon Express Considers Indian Expansion Near Semiconductor Hubs
India’s Limited Regional Trade Creates Structural Economic Disadvantage
El Niño Reaches Record Strength, Expected to Persist Through Winter
Uttarakhand Expands Overseas Jobs Scheme, 106 Youths Placed
India and Japan Urged to Deepen Indo-Pacific Cooperation
